Moody’s upgrades EssilorLuxottica to A1 rating with stable outlook

Investing.com -- Moody’s Ratings has upgraded EssilorLuxottica’s long-term issuer rating to A1 from A2, while changing the outlook to stable from positive, the ratings agency announced Thursday.

The upgrade reflects the eyewear giant’s "track record of strong execution" and its ability to grow both organically and through acquisitions, according to Lorenzo Re, Moody’s Vice President and lead analyst for EssilorLuxottica.

Moody’s also upgraded the rating on EssilorLuxottica’s senior unsecured instruments to A1 from A2 and upgraded to (P)A1 from (P)A2 the rating on its senior unsecured MTN program. The P-1 short-term issuer rating and commercial paper rating were affirmed.

The A1 rating recognizes EssilorLuxottica’s position as the global leader in corrective lenses and eyewear, supported by its strong brand portfolio, innovation capabilities, and vertically integrated business model that includes a large retail network.

The company reported 7.3% revenue growth at constant exchange rates in the first half of 2025, driven by solid execution, bolt-on acquisitions, and successful new products. Operating profit reached €2.5 billion in H1 2025, up from €2.4 billion in the same period of 2024.

Moody’s expects EssilorLuxottica to maintain organic revenue growth of around 4% with EBITDA improving to approximately €7.1 billion in 2025 and €7.6 billion in 2026, compared to €6.7 billion in 2024.

The company’s cash flow from operations is forecast to reach €5.6-€6.0 billion annually through 2026, with leverage expected to stay at or below 2.0x and retained cash flow to net debt exceeding 50%.

EssilorLuxottica’s liquidity remains excellent, supported by €2.8 billion in cash as of June 30, 2025, and €2.9 billion in available bank facilities. These resources adequately cover capital spending of around €2.5 billion per year, dividend payments of €1.5 billion in 2026, and debt maturities of €3.7 billion through the end of 2026.

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